The Euro is growing. Overview for 07.06.2016

07.06.2016

On Tuesday, the main currency pair is moving upwards, although not as active as two days earlier.

The Eurodollar is still on the positive wave. Or, rather, on the top of it, because there appeared no more negatives for the American currency, and all existing catalysts were already included in prices. The current quote for the pair is 1.1365.

The head of the USA Federal Reserve System, Janet Yellen, who delivered her speech yesterday, didn’t introduce any clarity to perspectives and future fiscal actions of the regulator. She noticed that the statistics published on Friday was, of course, “disappointing”, but it was just one report of many and one shouldn’t make a big deal of it. According to her opinion, the employment market situation is rather positive, and if it gets better along with the inflation approaching its target level, the interest rate increase would be not unreasonable.

In April, the inflation in the USA was 1.1% y/y; the target of the FRS is 2%. Most likely, the regulator will follow the May numbers of the CPI very closely. The next meeting of the FRS will be held on June 14th and 15th, and the statistics on the inflation will be published only on June 16th. It appears that there will be no very significant statistics prior to the meeting. Being very cautious in her comments, along with the statistics publishing calendar, Yellen may be suggesting that the interest rate won’t be changed in June after all.

For the US Dollar, this signal is moderately negative, which is partly included in prices already.

So far, the main currency pair has fixed in the range between 1.1130 and 1.1392 (yesterday’s high). The price may leave this range if the FRS makes new comments about its future decisions.

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